Remarks on Transatlantic Cooperation and the Crisis in Ukraine

Antony J. Blinken
Deputy Secretary of State
Professor Henrik Enderlein, Dean, Hertie School; Dr. Wolfgang Ischinger, Chairman, Munich Security Conference
Hertie School
Berlin, Germany
March 5, 2015

PROFESSOR ENDERLEIN: Deputy Secretary Blinken, ladies and gentlemen, excellencies, it’s a great honor to be here this afternoon to talk about transatlantic relations and the crisis in Ukraine we currently are facing.

Had you asked me ten years ago what I would like the Hertie School, when Hertie School was first established, to look like ten years later, I probably would have said, you know, this is the year 2015 when we introduce our second big Masters program, the Masters of International Affairs, and this is also the year we just normally host senior government officials from all over the world to deliver important policy messages. But I think I would have added, and if that senior government official could be a very colorful one, that would be even better. You know, someone who is a U.S.-born global citizen, French educated, known in DC for being a good jazz singer, Yankee’s fan, someone who the sitting U.S. Vice President calls a super star, and co-opened, allegedly, the White House meeting on the Arctic by saying, “The first thing we need to do is break the ice.” [Laughter]. That would be the ideal person. And here we are.

Deputy Secretary, you are here today. We are delighted. My staff told me, Henrik, you cannot introduce that person. You know, he was on the picture, that famous picture during the Osama bin Laden raid, right behind Hillary Clinton. You only understand things about economic policy-making, so you cannot introduce him. And I’d say you’re absolutely right. We prepared this and ten years ago we decided we would like to have you here, so we hired someone to make this introduction today. Our very own Wolfgang Ischinger, who is a Senior Fellow now at the Hertie School, is therefore here today and we are delighted for him to deliver the introductory remarks. Welcome, the floor is yours.

DR. ISCHINGER: Don’t worry. I know exactly that I am now standing between you and the Deputy Secretary of State, so I’ll make this exceedingly brief.

But let me first say Tony, we’re all delighted to have you here. This is I think the first time you are in Berlin as the Deputy Secretary of State. I’m pretty sure it won’t be the last time. So come back to the Auswärtiges Amt, to the Chancellery, but don’t forget the Hertie School. And we’re delighted to welcome you here today.

Tony Blinken was sworn in just about two months ago by the Secretary of State and instead of talking at length about where he comes from and what he does, let me quote from a press release dated November 7th which was when his future role, when the nomination was announced. And I quote Secretary Kerry. He said, “Diplomatic service is in Tony’s blood with his father, uncle, and his wife all having served at State during their careers. He comes home to the State Department knowing and appreciating the deep expertise that the department brings to bear in shaping our foreign policy.” Then a little later on he continues to say, “It’s a rare combination of deep policy expertise, impeccable judgment, and an inclusive leadership style that will make him an exceptional leader and manager in the Department.”

I think I couldn’t have put it in better words than Secretary Kerry.

I’m one of the happy people who can say about themselves that they’ve known and worked with Tony through various functions that you have and I had, and I want to just highlight one point.

I am extremely grateful to Tony Blinken who, as you know from his CV, was the principal advisor to the Vice President for the last number of years because I know exactly that the one person who made it possible for us at the Munich Security Conference to welcome for the first time in history a U.S. administration official at the level of the Vice President was Tony Blinken. So I really want to say thank you for that. Again, it was wonderful to have the Vice President once again this year.

One last word I want to say. The title of what Tony is going to talk about is, of course, the Transatlantic Relationship with, as I understand it, specific emphasis on the current crisis, the Ukraine crisis, the problems with Russia. I happen to believe that the efforts which have been ongoing since essentially a year ago, would be more successful, would be more complete if at every step of the way full U.S. participation had been possible.

I happen to share the thought that we would benefit - this is a matter for discussion -- we would benefit in trying to manage this crisis if we had a more inclusive format when we talk about the Minsk Contact Group or the Normandy format. My sense is if we had the U.S. always at the table when we speak with Russia, things might be even more balanced and hopefully then also slightly more successful.

So tell us all about this, Tony. The floor is yours. Welcome again. [Applause.]


Good afternoon. Thank you very much. Dean, thank you for a wonderful introduction. Even though a little exaggerated, it’s deeply appreciated. And Wolfgang, it’s a great pleasure to have this excuse to get together with you again. We go back to the 1990s when I served in the Clinton administration and Wolfgang was performing truly heroic service not only for his country but for the entire international community in the Balkans, among other places. And I remember that very well. In fact I remember dining in your home with one of my predecessors in this job, Strobe Talbot, some years ago. Since then we’ve had the great opportunity to work together on other things including Wehrkunde. So I’m grateful to have you here.

You mentioned, Dean, this famous photo of the bin Laden raid when a number of us were in the Situation Room at the White House, and the famous photo with the President, the Vice President, Secretary Clinton, and others. I was in the background of that photograph. We have a television show that I think is broadcast in Germany occasionally, The David Letterman Show. A couple of nights after that photograph was taken and published, David Letterman had as his guest the then-Chairman of our Joint Chiefs of Staff, Mike McMullen. And he pulled out the photograph and he pointed at me in the background and he said to McMullen, “Who is that guy? He obviously doesn’t belong in the photograph. Did he just come in off the tour of the White House?” Admiral Mullen, my great friend, just laughed, and didn’t say anything. So I have fond memories of that putting me in my place. [Laughter].

I’m grateful today also to be joined by some colleagues from Washington including our Deputy Assistant Secretary of State for Europe and also a great embassy team including our DCM, Jim Melville, who is doing a remarkable job. Ambassador Emerson is back in the United States, otherwise he’d be here today. But I’m grateful to have Jim and the team with me.

This has been the tail end now of a very productive trip that’s taken place over the course of the last week.

You’ll understand that Americans sometimes are accused of not understanding Europe or its geography by the itinerary of the trip. It started in Paris, it went to Moldova, then it went to London, then to Berlin, and tomorrow to Kyiv. So that doesn’t make a lot of sense, but somehow we’ve pulled it together. It’s been a very interesting trip. A lot of focus on Ukraine which is what I want to talk about today, but every other issue under the sun. And here in Germany in particular, what’s striking to me, especially thinking back even to the very productive work we did in the 1990s, is that at no time in my experience has the relationship with Germany and the United States covered more issues around the world, covered them in a deeper fashion, and covered them in a more collaborative fashion than we’re doing today. It is truly extraordinary and I have to tell you the United States is grateful for this partnership. President Obama is particularly grateful for his partnership with Chancellor Merkel. I know the Secretary of State feels the same way about his partnership with the Foreign Minister.

I’m very honored to be here at the Hertie School. It has literally become a mainstay of European policy analysis in a very short period of time. The Dean and I were talking about this. This is becoming, in our parlance, the Kennedy School of Germany, and that’s extraordinary.

In many ways I think what we’re seeing here is, in your great diversity, in your engagement, almost a practical symbol of a thriving, transatlantic community. It’s a community whose essential character is defined not by a single language or culture or religion or ethnicity, but by our common embrace of basic values. Democracy, the rule of law, the dignity of every human being. These are values that we strive to live up to. We don’t always succeed, but we’re constantly trying. And these are values that are being tested right now as Russian aggression engulfs Eastern Ukraine and imperils the Europe whole, free and at peace.

This crisis that we face in Ukraine today not only challenges this great European construction project. In my judgment, and this is why we care so much about it, it also threatens the governing principles of the international order that we all have a stake in defending.

If you go back 14 months, people took to the streets in Kyiv and other parts of Ukraine to demand an end to corruption and to insist that their leaders make good on a promise they had just broken to give Ukraine a European future. That’s what was happening on the Maidan. These were not anarchists, these were not fascists, these were regular citizens -- students, business owners, veterans, grandmothers. The government responded with violence, with beatings, with snipers that killed more than a hundred people. Working with Germany, working with France, working with the United Kingdom, the United States helped to broker talks between President Yanukovych and the opposition and also with Russia, and they led to a deal that would have ended the violence, allowed Yanukovych to stay on for some period of time until elections could take place. But Yanukovych fled. Having forfeited his legitimacy, and indeed lost the support of his own party, western-oriented reformers filled the void -- pursuant to the constitution and with the overwhelming support of Yanukovych’s party -- to try and make good on the promise of the Maidan.

President Putin saw Ukraine slipping from Russian influence. He manufactured a reverse Maidan in Crimea and Eastern Ukraine, inventing separatism. There was almost nothing spontaneous or indigenous about it. So even as Ukraine began building a peaceful, democratic, independent nation on 93 percent of its territory, Crimea and parts of Eastern Ukraine suffered under a reign of aggression and violence. Today Crimea remains under illegal occupation and human rights violations are the norm, not the exception, for many at risk groups: Crimean Tatars, Ukrainians who won’t give up their passports, lesbian and gay citizens, and others.

And of course in eastern Ukraine, it’s true, citizens there before the crisis wanted more direct control over their daily lives and they wanted respect for Russian culture and Russian language. But think about it. Before the crisis there was no violence in eastern Ukraine. The government was not abusing the fundamental rights of its citizens. Indeed, ethnic Russians in the Donbass enjoyed more rights and freedoms than most ethnic Russians in Russia. Moscow and self-appointed separatist leaders who were Russian nationalists manufactured a crisis, broke the peace, and unleashed what fast became a reign of terror. Seizing government buildings, cowing the local populace, shooting at police who could not shoot back, downing MH-17 - a civilian airliner, holding sham elections, taking over the border between Russia and Ukraine. Pouring thousands of Russian heavy weapons into Ukraine and troops, fueling the conflict. Repeatedly violating ceasefires that were unilaterally declared by Ukraine and killing Ukrainian soldiers. Obliterating the Donetsk Airport. Taking hundreds of hostages including to this day Nadiya Savchenko, a Ukrainian pilot kidnapped from Ukraine and who languishes in a Moscow jail on day 84 of a hunger strike. Expanding their territorial reach by more than a thousand square kilometers after the first Minsk Accord was signed last September, beyond the line of control that had been established. And more recently seizing Debaltseve, a key rail hub beyond the ceasefire lines, six days after the Minsk implementation plan was agreed, and following a vicious assault that resulted in over 500 deaths according to the United Nations.

So that’s what’s largely happened over the past year on one side of the equation. What has been the response from Kyiv?

Well, despite the conflict, the government has worked very hard to forge a new and better future. It signed the Association Agreement with the European Union. It held free and fair elections, not once but twice under siege and producing, for whatever its deficiencies, probably the best government that Ukraine has had since its independence. It’s been working to undertake deep and comprehensive economic and political reforms. These include laws to enhance transparency in public procurement, to reduce the government inefficiency and corruption. To clean up Ukraine’s energy sector, to make the banking system more transparent, and measures to improve the climate for business and attract foreign investment. To create a new anti-corruption agency. To strengthen the prosecutor general’s office. And today as we speak, the Rada is also moving forward on political decentralization to give Ukraine’s regions more authority in advance of local elections that under the Minsk Implementation Plan are to be held in October. So the Ukrainians are trying despite the incredibly difficult environment in which they’re living.

What has our response been? The United States, Germany, our European partners? Well, throughout we’ve tried to do four things. We’ve tried to support Ukraine with economic assistance, security assistance, and other support. We’ve worked to reassure our NATO allies who have been deeply concerned by Russia’s actions in Ukraine. We have sought to impose costs on Russia for its actions in Ukraine. And we have worked to pursue diplomacy, which remains the only sustainable answer to the conflict in Eastern Ukraine.

In terms of support for Ukraine, as you know, they’re been IMF packages, worth well over $20 billion to help keep reform on track because they’re conditional. Keep the border protected, the energy section functioning, the economy afloat. The United States itself has provided recently $1 billion in a loan guarantee with another billion on the way if the reforms continue. We in the United States have worked to help Ukraine defend itself with more than $120 million in security assistance including things like protective vests, night vision goggles, counter-battery radars, explosive ordnance, disposal robots and so on.

In terms of our reassurance to NATO, we work very closely with our key partners investing money, but also working to create a virtually constant land, sea and air presence in the front line states since the crisis erupted. We impose costs on Russia -which I’ll come back to - to try and convince Putin to change course. And let me be very clear about this because it’s important. The purpose of that response was not to weaken Russia. It was not to foment a color revolution. It was not to topple Vladimir Putin, but simply to persuade Russia to cease its aggression in Ukraine.

Now as you all know very very well, competing narratives have emerged between Russia, and the United States and Europe and the West about what’s happened over the last 15 or 20 years and what our intentions are - and are not. And there’s clearly a Russian narrative that we are out to diminish Russia, we’re out to encircle it, we’re out to contain it, and we’re out to, as I said, even to foment a color revolution. And I understand, looking at things from a Russian perspective, that certain things have happened over the last 20 years that could feed that perception. Arguably, NATO enlargement could. I would argue that it should be seen in another way but I understand how Russians can see that. Pulling out of the ABM Treaty. I certainly understand how that could create such an impression in Russia. But the fact is over the last 20 years we collectively in the United States and in Europe have tried to do just the opposite. We’ve tried to bring Russia in. We’ve tried to integrate Russia into the international system. We invited them to join the Partnership for Peace in 1994; the Council of Europe in 1996; the NATO-Russia Founding Act in 1999; the Charter for European Security, the OSCE, again in 1999; and most recently, President Obama was Russia’s greatest champion to get into the World Trade Organization. And of course in the United States alone we’ve spent over $20 billion since 1991 in support to Russia for non-proliferation, for the economy, for free media, and so forth.

So it’s true, we have these competing, different narratives, but from our perspective we have sought very hard and strongly to bring Russia in. Wolfgang will remember this well. The first Munich Security Conference that our administration was able to take part in in 2009 was the one that Vice President Biden attended. And it was at that conference in February 2009 that he gave what was really the first foreign policy speech of the Obama administration and set out the reset policy with Russia. And he made very clear that we sought to strengthen our foundation of cooperation with Russia, which had eroded in the previous years. And that’s exactly what we did and there were some very concrete, important results including the work that we did on the New START Agreement, including work that we did together in Afghanistan, including something that lasts to this day, real cooperation in working to convince Iran to foreswear nuclear weapons. And we were, I think, hopeful that we could move the relationship forward in a concrete way, that advanced our interests and advanced Russia’s interests and advanced Europe’s interests.

But it’s interesting what got the headlines from that speech was the reset. What some people missed in the speech was the Vice President saying very clearly, even as we pursue a reset with Russia, we have certain basic principles upon which we will not compromise. We do not accept the proposition that spheres of influence are a relevant way of doing business in the 21st century and we stand strongly for the proposition that a democratic country has the right to choose its own future, to choose with whom it will associate. And we won’t compromise on that.

And it’s interesting now, thinking about that in retrospect and everything that’s happened, it turns out that that piece of the speech was prescient, and maybe even more prescient, unfortunately than the reset piece.

Finally, as I said, in terms of our approach to the problem, we have worked to sustain diplomacy because we do not believe there’s a military solution to the conflict. We’ve repeatedly tried to give President Putin what we call an off-ramp. When you’re driving down the highway and there are exits we call them off-ramps. Unfortunately, each time we worked to give him an off-ramp, he’s pressed the accelerator and gone right past it.

So where does that leave us today? I think the efforts that we’ve undertaken together have produced some success. They’ve created time and space for the elections that I talked about to take place in an independent Ukraine, to allow Ukraine to sign the Accession Agreement with the European Union, which was one of the causes of the crisis in the first place.

And in my judgment at least, what’s happened to date has been a profound strategic loss for Russia that will become more and more clear over time. Why do I say that?

Well, first, Russia has, and Putin has in effect lost 93 percent of Ukraine. It is now more united and more Western-oriented than ever before. And the anger and indeed even hatred directed at Russia is something that will take, unfortunately, a long time to overcome.

Russia’s actions in Ukraine have reenergized NATO in a way we haven’t seen in many years. They’ve also energized Europe’s efforts to diversify its energy supply to end its dependence on Russia. And of course, maybe most significantly, the Russian economy is in a freefall because of the sanctions, because of the oil prices declining dramatically, and because of mismanagement of the economy that was taking place well before the crisis. A record $151 billion in capital has fled the country over the last year. Foreign direct investment has basically dried up. The ruble is at an all-time low despite Russia spending $100 billion in reserves trying to defend it. Russia’s credit rating is at what we call “junk” status. The economy, which had been growing at a little over two percent before the crisis, is predicted to fall into recession this year. The sanctions that we’ve designed, including particularly the sanctions on energy technology, are going to deny Russia the sophisticated technology it needs to exploit, going into the future, harder to reach energy sources. Inflation’s running at 15 percent across the country. Food prices are up 40 percent. And unfortunately, this is having the effect of hurting average Russians.

Throughout all of this we have remained united - the United States and Europe - despite Putin’s best efforts to divide us. That’s been maybe our greatest source of strength. So that’s on the positive side of the ledger.

On the negative side is the reality that the conflict continues. And instead of working to end it, unfortunately at least up until very recently, Russia has been continuing to fuel it.

In part I think what’s going on is this: Precisely because President Putin doesn’t have an economic card to play with his people because he can’t deliver for them economically, the one card he has left is the nationalist card. So it works in the short term. It distracts people. And you see that in his popularity and approval ratings. But the problem with playing the nationalist card is you have to keep playing it because the moment you stop, people start to look up and look around and realize that things aren’t going so well. And that’s a very dangerous dynamic to be in, not only for Russia and Putin, but also for us, because how do you break out of it? How do you create incentives for Russia and for President Putin to stop the cycle of provocations that he needs to sustain the support at home? And that’s something we’re grappling with right now.

Second on the down side of the ledger is the terrible effects that the ongoing conflict is having in Ukraine itself. The human toll is significant. 1.7 million Ukrainians have been forced to flee from their homes and over 6,000 lives have been lost. The Ukrainian economy is right on the edge. Ukraine is spending money that it does not have on defense. It’s lost, for now, the Donbass, a part of its economy and that is, as you know, the manufacturing base and the export-driving base of the economy. That’s been taken out of the picture. And when there’s a conflict going on, foreign investment is hard to attract because people don’t want to invest into that kind of uncertainty.

So we’ve been compelled to do everything we can in the United States and Germany, in Europe, the international financial institutions, to sustain Ukraine economically and that’s imposing a cost on us.

So where do we go from here? It’s a first imperative that we do everything we can to end the conflict in the Donbass and restore Ukraine’s sovereignty and territorial integrity. That’s why the efforts of Chancellor Merkel and President Hollande in Minsk on February 12th to try again to end the fighting in Ukraine’s east are so important and why we so strongly support them.

The Minsk package of agreements -- September 5th of last year, September 19th, and the February 12th implementing agreement -- offer the promise but not the certainty of peace, of disarmament, of political normalization, of decentralization in eastern Ukraine, and returning Ukrainian state sovereignty and control over its territories and borders.

This package if it’s implemented represents a fair deal brokered and agreed to by all sides. Russia agreed to it, Ukraine agreed to it, the separatists agreed to it, the international community stands behind it. It needs to be implemented. And the critical elements of that implementation include a complete ceasefire in all parts of eastern Ukraine. That has not yet happened. They include full and unfettered access over the whole conflict zone including separatist-held territories for the OSCE and the monitors that they employ. It has to include a full pull-back of heavy weapons -- Ukrainian, Russian, separatist, monitored, and verified by the OSCE. The return of hostages. The removal from Ukraine of all foreign forces and weapons. And ultimately, and most critically, the restoration of Ukraine’s international border. Because unless that happens, and until that happens, Russia will always have, President Putin will always have, the possibility to turn up the dial any time he wants -- sending weapons in, sending men in, material in, and reigniting the conflict. So the critical piece, which is the last piece in the implementation plan, is getting border back under control, giving Ukraine sovereignty over its border with Russia.

If Russia and the separatists, if controls make good on these and other commitments we can and we will start to roll back the sanctions that have been imposed on them. On the other hand, if they don’t, or if they take further aggressive action, we will increase those sanctions and that pressure. The choice is clear and it’s up to President Putin.

Let me conclude with this. Why does any of this matter? Why does it matter to us? Why should it matter to you? Well, in the first instance, in the United States our concern for Ukraine is about helping a European state meet its democratic aspirations and helping to forge a Europe that is more whole, free, and at peace. If Ukraine is not whole, if all of its people are not free, and if it’s not at peace, then in a sense Europe is not either. But even more than that, it is about defending the global rules-based system that we are working together to build. We all have a stake in upholding those rules that borders and the territorial integrity of the democratic state cannot be changed by force. If that rule does not stand, countries around the world may presume that their interests too can be advanced at the barrel of a gun.

Another principle and rule that’s at stake, that it is the inherent right of citizens in a democracy to make their country’s choices and to determine its future. Not any outside force or country, not the United States, not Europe, not Russia. If not, if we don’t stand up for that rule, large states will be given a free pass to bully their neighbors into submission.

Another principle, linguistic nationalism, that whoever speaks Russian is Russian, should not be allowed to be resurrected. If not, it will be open season on aggression, on conflict, and on chaos.

Finally, responsible countries must live up to their international commitments. And this is particularly, and in a very interesting way, resonant in the Ukraine crisis.

As some of you will remember, and as Wolfgang and I know from our direct experience, when the Soviet Union dissolved, it left several successor states that inherited nuclear weapons. Kazakhstan, Belarus, and Ukraine, and we worked very closely together during that period of time to convince those successor states to give up the nuclear weapons they had inherited. And in the case of Ukraine, the Ukrainians said we’ll do it, but we want guarantees for our territorial integrity and our sovereignty, and three guarantors stood up and said you’ve got it. The United Kingdom, the United States, and Russia. Now Russia has in effect torn up that solemn commitment that it made, and at a time when we’re trying to get the North Koreans to give up the nuclear weapons they have, and at this very moment working to convince Iran to forswear nuclear weapons, what does that say to them? What would it say to countries around the world who we want not to have nuclear weapons or to give up the weapons they have and who may understand when they seek some basic assurances from us, what does it say to them when in the case of Ukraine, those assurances were blatantly disregarded and trampled on by one of the assuring states, in this case Russia? It sets a terrible precedent for everything that we’re trying to achieve.

So I think what’s at stake here is, on the one hand the European construction project and everything that’s gone into that, but even more, even more, rules that are central to an international system of peace, security, prosperity, and freedom. We have, I believe, a collective responsibility to uphold those rules, and that’s what we’re trying to do in the case of Ukraine.

Just as this crisis reminds us why our transatlantic alliance is so important, I think it also reminds us of why it is strong. Throughout the decades its resilience has been tested in war, it’s been deepened in peace, and it’s been energized by the ingenuity and the talent of new generations of Atlanticists like, I suspect, many of the people in this room.

So as you finish your studies and you think about what you want to do next, I only hope that you’ll deepen your engagement in these issues and continue the work that many of us have started, to build a foundation of peace, freedom, security, and prosperity that we hope more than anything else will be our common future.

Thank you very much.

MODERATOR: Thank you so much for your speech. I’m just skimming through the Twitter feed and the way the debate is being reacted to this, and Deputy Secretary has accepted a few questions. So I will actually ask the first question and then the next question in the room will go to a Hertie student. So be preparing that question.

My first reaction to that very powerful, a very transatlantic speech where it’s clear that you pointed out the extent to which Ukraine belongs to Europe, and that would be my first question. Does Ukraine belong to what is the European Union today? Should it belong there?

DEPUTY SECRETARY BLINKEN: It’s up to its people. It is a choice for Ukrainians to make. I think what we saw is that a majority of the Ukrainians wanted that future and their leader at the time said he would make good on that desire and he gave every indication up until the last minute, last year, that he would sign, actually the year before, right at the end of the year, that he would sign the Association Agreement with the European Union in response to the aspiration of what seemed to be the majority of Ukrainians. And in fact it was the fact at the very last minute he did an about face that helped fuel the Maidan protests.

So my sense is, this [the Association Agreement] is the desire of the Ukrainian people. And as I said it’s their choice. It’s not Europe’s choice. It’s not America’s choice and it’s not Russia’s choice. It’s their [the Ukrainians’] choice provided of course they can meet the requirements of membership. And there’s a lot to be done there.

Now in fairness, and as I also suggested, there clearly are communities of people in the east of the country who have deep and understandable and long time affinities for Russia. Ethnic Russians but I think also Ukrainians who have deep ties of language, of culture, of history, who want to make sure that those ties remain and are respected and indeed are strengthened. That is totally consistent with a European future as well for Ukraine. Arguably, maybe we should have done more work before the effort to sign the Association Agreement was done to show that these things were compatible. But the bottom line is, I believe that it’s up to the Ukrainian people, and they’ve been pretty clear about where their future lies.

MODERATOR: Thank you. Let’s open the floor and go here, please. We’re getting a microphone for you. There is a rule. I am very strict on rules. Rule number one, say your name. Rule number two, only one sentence. [Laughter.]

QUESTION: My name is Gabriel. I’m a student from Mexico.

My question regarding nature of the broader public opinion in Russia in this crisis. I wonder to what extent could the domestic pressure on President Putin’s government turn the course of action of the Russian government, because I do not understand how public opinion in Europe and in Russia can differ so much on the issue of what’s going on in Ukraine.

DEPUTY SECRETARY BLINKEN: It’s a great question. Let me start the answer by saying that two days ago Rossiya published a piece that was illustrated and this is what the Russian people are reading every day or listening to every day. And the piece said that the new Ukrainian currency would feature a picture of Adolf Hitler and showed what this currency would look like.

Now we can laugh about that in a kind of tragic way, but that’s just a tiny example of the extraordinary propaganda machine that President Putin has unfortunately done a masterful job in building and that the Russian people are subjected to every day.

If you look at public polling in Russia, for example, throughout the crisis huge majorities of Russians, 80-90 percent, didn’t believe that there were any Russians in Ukraine despite very compelling evidence to the contrary. And it’s very hard if any of us were fed a steady diet of this propaganda not to be persuaded by it.

Meanwhile you have most recently with the assassination of Mr. Nemtsov, a climate of fear that is emerging in Russia, and I think that’s causing many of the most talented citizens to leave, because they’re afraid. No – the quote can’t be changed

You know, this will sound like a harsh statement, but I think unfortunately there is more and more truth to it. In our countries, in Germany, in the United States, you can challenge your government and win. In Russia, the perception is taking hold that if you challenge your government, you die.

So in that kind of environment, it’s not a total surprise that there is this huge disconnect between public opinion and narrative in Europe and public opinion and narrative in Russia. And what to do about that is a very big challenge.

I think the other thing that you’re seeing in Russia is, as we saw in Ukraine, great dismay at corruption, public corruption. But precisely because this crisis has happened and President Putin has used it effectively, he’s also managed to distract people from that.

I think you just have to keep fighting fiction with facts and hoping that the truth over time begins to penetrate. Then of course the economic situation in Russia at some point, if it continues in this direction, will create pressure I think for change, but it’s very, very difficult to deal with this kind of propaganda. In a sense it’s a throwback to the Cold War, but it’s being done in a very, very sophisticated way.

QUESTION: Why is the U.S. so interested in improving democracy in Ukraine? Wouldn’t it be sufficient to care about democracy within U.S. borders?

DEPUTY SECRETARY BLINKEN: Well, it’s a very good question. I think that our basic experience is that, you know, Tom Friedman, one of our writers, had a wonderful line a few years ago in which he said if you don’t visit the bad neighborhoods, the bad neighborhoods have a tendency to visit you. [Laughter.] So it’s really not sufficient for us in the 21st century when we’re so interconnected for there to be just a small island of democracies around the world and everyone else to be doing what they want in undemocratic ways. Because inevitably, that’s going to affect us, whether we like it or not.

So as a general proposition we have a real stake in terms of our own interests, never mind our values, in democracy taking root in different countries. I think that’s all the more critical right within Europe, especially after the experience of the 20th century when we know what happened when democracy was not the prevailing rule in all of Europe, and the incredible work that’s been done since then to strengthen the foundation of democracy. To see that challenge so long after the events of the last century I think gives us great, great, great concern.

But as I tried to suggest, it’s not just democracy itself. It’s some basic rules of conduct that go to having a more stable, peaceful, secure, and, in that context, prosperous international order. And those rules are being violated in Ukraine and I think we have a stake in standing up and defending them.

MODERATOR: As you can see, we have a very open and frank type of discussion. I go back there.

QUESTION: My question is, can there be a diplomatic solution without a credible military threat?

DEPUTY SECRETARY BLINKEN: Here’s the challenge. I think, in a sense if you’re playing on the military terrain in Ukraine, you’re playing to Russia’s strength, because Russia is right next door. It has a huge amount of military equipment and military force right on the border. Anything we did as countries in terms of military support for Ukraine is likely to be matched and then doubled and tripled and quadrupled by Russia. It has the ability to do that. It would be very difficult for us to do that. And then you may well get into an escalatory cycle that is hard to control and hard to predict.

We’re better off, I think, playing to our own strengths. One of those strengths is the economic strength that we have. So the pressure that we’ve exerted on Russia economically -- again, not to punish Russia, period, but to impose costs for its conduct in Ukraine and to try to get it to change course -- that’s a strength of ours, and we’ve see the results combined with the falling oil prices.

One of the things that bothers me though, I have to tell you, and I think it’s reflected a little bit in the debate. It’s interesting, you hear this in Europe and you hear this in the United States is, there’s a larger narrative. And yes, Ukraine has many deficiencies in governance, in its system, in its own corruption, many other problems. It’s working to correct them, but it’s difficult and it’s challenging. But why isn’t Ukraine more of a cause? Why don’t people care more about the abuse of the country, about the trampling of its sovereignty and territorial integrity, about taking the choice away from the Ukrainian people about their future?

You know, you’ve had in the past the Save Darfur movement where people were mobilized and energized. You don’t see that same kind of mobilization, energy, and passion about what’s going on in Ukraine. I think in part it’s because the Russians have done a good job in muddying the waters and we tend to be focused on the details: have the Ukrainians made good on their commitment to move out of this town, have the separatists made good on their commitment to stop firing into that town, and we lose sight of the bigger picture and the bigger principles that are at stake, and I think that’s unfortunate. Because it’s worth concentrating our minds on what’s really at stake here and acting.

But at the end of the day, I don’t think at the end of the day the solution is going to be a military one. It has to be a combination of pressure. We have to continue and do more to help the Ukrainians defend themselves including militarily, but ultimately it’s this combination of pressure and diplomacy that I hope will bring this to a conclusion.

MODERATOR: We have one more question here, perhaps the last one, and then we have to wrap up. The mike is coming.

QUESTION: My name is [Inaudible] Wagner [phon], I work for Gazprom, a Russian company.

You just portrayed Russian gas supply or energy as unreliable or there is a need for diversification. Are you aware that Russia or the Soviet Union has served gas to Europe for more than 40 years without a single interruption? That actually we are facing a transit crisis and never a supply crisis? Are you aware of that?

DEPUTY SECRETARY BLINKEN: I’m aware that what we’ve seen in Ukraine most recently is Russia very clearly using gas as a political tool to pressure and leverage the Ukrainians. And to threaten supply disruptions in Europe in an effort to get the Europeans to press the Ukrainians to take a softer line. That’s what I‘m aware of. We have no desire to remove Russian gas from the market, but we think that what’s been demonstrated by the use of gas as a political tool is that it’s a mistake to be overly reliant on any one country in the energy environment, that Europe has a strong interest in making sure it’s not overly dependent on Russia or anyone else for that matter.

But if gas were not used as a political tool and the mere threat is enough -- you don’t actually have to cut supplies. If you threaten to cut supplies you can get the result that you want. If that’s the way it’s going to be used, then I think that’s simply going to spur Europeans to be a lot more aggressive in looking for other sources, other routes, other suppliers.

MODERATOR: We take a question here and then there was a question in the back please.

QUESTION: Oliver Leffler (phon), MPP program here. Friends of mine have been increasingly concerned about the future of the transatlantic relationship in light of the spy scandal and dissatisfaction with the TTIP negotiations. How should I respond to them? [Laughter.]

DEPUTY SECRETARY BLINKEN: Look, it’s interesting. We’re working now, as you mentioned, on T-TIP. There are a lot of myths about what it would produce and some misinformation, and I think one of the obligations that those of us who support the effort have is to better explain it and to better help people understand some of the myths that have arisen. Because what’s going on is quite extraordinary. Right now we’re working in Asia on a new free trade agreement, the Trans=Pacific Partnership. That, I believe, stands a very good chance of being concluded before the end of the year. And if and when it is concluded it will cover 40 percent of world GDP and it will facilitate trade with high standards -- labor, environment, and other critical social issues. And it’s going to fuel growth and that in turn will create more jobs.

And we’re trying to work, in a similar way on T-TIP. Now we already have a much higher base in Europe because of the relationships we have. But there too, when T-TIP comes into play, if it does, you’re going to be covering 70-75 percent of world GDP in these agreements that again raise the standard, not simply in facilitating trade, but making sure the way we trade and the obligations that are undertaken actually advance human dignity, as well as human prosperity.

So I think there’s a lot at stake and there’s a very strong case to be made but it’s actually incumbent upon leaders to make it.

We have and we will always have frictions in our relations and there will always be a crisis of some kind in the relationship. You can go back and look at the history of this, and almost every decade there’s been something.

I wrote as a dissertation and as a book about the - something Wolfgang will remember but most of you are too young to even know about - which is the so-called Siberian Pipeline crisis in which in the wake of Afghanistan the United States tried to stop Europe from building a gas pipeline between Siberia and Europe. Ironically, the argument in my book was in favor of the pipeline -- as said my friend from Gazprom.

Parenthetically that book, when it was reviewed, which is a warning to all of you, someone said it’s the kind of book that once you put it down it’s very hard to pick up again. So I don’t recommend it to any of you. [Laughter.] But this was just one of the many crises that we had in the alliance. So there’s always going to be something.

But if you look at what’s happening every single day between our countries, from the United States perspective, for all of the talk of the rebalance to Asia, and maybe that was the wrong word to choose. And it’s real because theres an incredible dynamism in Asia and we want to be part of it. Whenever we are looking for a partner to deal with challenges, to seize opportunities, to advance our security, to deepen our prosperity, the first place we look is still Europe. That is where the most natural affinity lies. That is where we have a strong history of cooperation and a strong set of common values despite disagreements over things including over the issue of the NSA program.

So I think when you look at those fundamentals, when you see that we’re doing more business together than ever before, that more and more students are spending time in our respective countries, that more and more people are traveling back and forth, that we’re more connected on a minute-by-minute basis than we’ve ever been in our history. To me, that is a tremendous source of strength and great evidence that the relationship’, for whatever the clouds of the moment, is one that is really mostly blue skies.

MODERATOR: What a beautiful word of conclusion. We have to end. My last question is, when you will be back in 10 years, where will Ukraine be? One sentence.

DEPUTY SECRETARY BLINKEN: One sentence? [Laughter.] Tony Blinken. Ukraine. [Laughter.] Ukraine in ten years I think will be an increasingly thriving part of Europe.

MODERATOR: Very good. We keep it here. Thank you very much. My thanks go to the embassy and Mr. Melville, go to the entire team of the State Department, to my dear colleague Wolfgang Ischinger and to you, the Deputy Secretary. Thank you so much.

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